CLSA has expressed a positive outlook for the Indian IT sector heading into FY26, citing multiple positive signals, particularly from the US BFSI (Banking, Financial Services, and Insurance) sector, which is on a growth trajectory despite policy uncertainties.
Key Highlights:
- US BFSI Sector: The 2025 outlook remains positive, with continued growth momentum.
- Global Telecom Players: Expect weak capex growth in 2025 as telecom companies focus on cost optimization.
- EPAM Systems: Provided a +1% to +5% organic constant currency (CC) revenue growth guidance for 2025, compared to a -1.7% decline in 2024.
- Globant: Reported a weak Q4FY24 and Q1FY25 guidance, impacted by macro headwinds and tight pricing.
Stock Ratings:
- Outperform Ratings:
- Tech Mahindra: Strong order book and robust execution.
- TCS: Industry leader with consistent growth.
- Wipro: Positioned well for cost optimization themes.
- Hold Ratings:
- HCL Technologies and Infosys due to valuation constraints and moderate growth outlook.
CLSA’s optimistic stance is driven by positive growth signals from key verticals and cost optimization strategies across global markets. It believes that Indian IT firms are well-positioned to leverage these trends, particularly in the US BFSI sector.
